OFID IN ACTION
Energy: Rehabilitation in the Dominican Republic, new build in Cameroon
Better energy access will support growth in the Dominican Republic. Cameroon’s new plant will be its largest generator of electricity.
Project title: Electricity Distribu- tion Rehabilitation and Loss Reduc- tion Program – Phase III Amount: $75m Mechanism: Public Sector loan Co-financiers: Andean Develop- ment Corporation (CAF), govern- ment of Dominican Republic
OFID signed a $75m loan agreement with the Dominican Republic in 2018 to support growth and living standards by helping to improve access to energy.
The Dominican Republic’s energy sector faces the joint challenges of increasing electricity generation, and reducing costs and transmission losses. Some areas of the country experience frequent power outages and more than half of all end users are non-metered, resulting in lost revenue.
The government of the Dominican Republic is focused on reforming the energy sector and has partnered with OFID and other DFIs to do so. The present phase of the program will target 21 secondary distribution networks across the country – directly benefiting approximately 607,500
people. OFID also co-financed the earlier phases of the program with two loans totaling $90m.
Project title: Nachtigal Hydro- power Company (NHPC) Amount: €50m Mechanism: Private Sector loan Co-financiers: Various, including AFC, the AfDB, CDC Group, Proparco, FMO, DEG, Agence Française de Développement, the Emerging Africa Infrastructure Fund, the European Investment Bank, IFC and local banks
In 2018, OFID signed a term loan of up to €50m with Nachtigal Hydro- power Company for the develop- ment, construction and operation of a 420 MW hydropower plant in Cameroon. Thomson Reuters’ Project Finance International named the transaction Global Multilateral Deal of the Year for 2018.
The Nachtigal Project is being developed as a public-private partnership by a joint venture between the IFC, Electricité de France (EDF) and the government of Cameroon, with support from the World Bank Group.
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Deemed high priority by the government of Cameroon, the plant, once in operation, will be the country’s largest generator of electricity, meeting about one-third of Cameroon’s electricity needs. The project is at the heart of Cameroon’s Electricity Sector Development Plan and its quest for low cost electricity. Presently, an estimated nine million people, including the vast majority of Cameroon’s rural population, lacks access to electricity.
The project’s expected total cost of €1.2bn is thought to be one of the largest foreign direct investments in Cameroon and should make a significant economic and develop- ment impact.
Photo: Nelson Pulido
Photo: Deborah Lee Rossiter/
Shutterstock.com
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